The Use Cases and Applications for Involving Women in Blockchain

“Satoshi is female!”

That’s how New York Congresswoman Carolyn Maloney rallied the crowd on May 13 at the “Women on the Block” event in Brooklyn, New York, where more than 300 people came together to talk about cryptocurrency and blockchain technology. The event comes at time of tension within the crypto community, as blockchain stars like Lightning Labs CEO Elizabeth Stark are urging interviewers to stop asking what it’s like to be a woman in crypto.

“Stop marginalizing and write about the awesome work that women are doing,” Stark tweeted in February.

But to the ladies at the event, it’s less about creating a divide and more about a welcome reprieve from the perennial challenge of being treated like a crypto unicorn, when they just want to discuss use cases and applications.

True to that, many of the day’s discussions focused on the business opportunities within the space, from using the technology to shine a light on the opaque real estate industry to utilizing blockchain for supply chain management within the food sector.

Nonetheless, the fact is that women are still underrepresented in positions of privilege and power across the board – and the blockchain industry is no exception.

Based on findings from an international Quartz survey of 378 venture-backed crypto and blockchain companies founded between January 2012 and January 2018, roughly 8.5 percent had a woman on the founding team, compared to 17.7 percent in the broader tech industry.

And according to many women at the event, this lack of gender parity could hold the nascent industry back significantly.

“Women have a better understanding and different priorities with this technology,” European Parliament member Eva Kaili from Greece told the crowd, adding:

“We believe, with these tools, you can have a strong influence on the future.”

A true need

Sure enough, women at the event, including German entrepreneur Masha McConaghy, co-founder of both BigchainDB and the Ocean Protocol, told CoinDesk that women could benefit from blockchain technology, perhaps, even more than men.

That’s because women still deal with issues surrounding financial access and empowerment – women make up the majority of the world’s poor, according to the World Bank – and a pseudonymous and censorship-resistant system could provide a solution.

For instance, in Saudi Arabia, women are still legally barred from receiving a business loan or license until two men testify of her behalf. And according to the National Coalition Against Domestic Violence, at least 94 percent of women who experienced domestic abuse were also victims of economic abuse, where the abuser controlled her access to income or financial services.

McConaghy told CoinDesk, “We still don’t have it [freedom] yet, but we are moving towards it.”

“There are still women whose husbands and fathers are controlling and they can’t access their own money.”

For her, inclusive corporate practices are the key to building effective blockchain solutions that take these different problems women deal with into account.

“If there is diversity, those conversations will happen,” she said.

And that could happen sooner than some expect. Kaili celebrated the fact that women are rising into leadership roles very quickly within the space, not just in terms of entrepreneurship, but also as it relates to legal research, diplomacy and open-source projects.

That makes sense, she continued, considering the cryptocurrency boom is popularizing conversations women have been having for years about financial access and control.

Focus on education

For many women at the event – who on Mother’s Day brought mothers, daughters and sisters – the key to getting more women in the space is education.

Education programs and data-sharing initiatives, like Women Who Code, were hot topics. And it was even proposed that the Women on the Block events should go on the road.

Speaking to this on a panel about investing in blockchain technology, Liz Rabban, vice president of business development at Celsius Network, a decentralized lending platform, said:

“The concept of decentralization and empowerment can only exist if we have education.”

And these statements about education generally garnered more applause than even Maloney’s opening statement about Satoshi [Nakamoto], the pseudonymous creator of bitcoin, the cryptocurrency that originally spurred all this excitement.

Still, Kaili was quick to note that the blockchain industry will only “duplicate the problems we already have” if leaders don’t prioritize gender parity.

But in knowing the struggles that women in the industry, and even more broadly, face, the tone of the day wasn’t discouraged. As a matter of fact, many of the women joked about the current perks of being a minority in the space – including the fact that there’s hardly ever a line for the women’s restroom.

Women on the Block organizer Alexandra Levin-Kramer promptly quipped:

“Not for long!”

Cornell Professor Unveils ‘Simple Yet Powerful’ Consensus Protocols

A pseudonymous team of developers have created a family of new consensus protocols for blockchains.

Cornell University professor and blockchain researcher Emin Gun Sirer announced the new protocols Thursday at Token Summit III in New York, explaining that they combine what he referred to as the “classical consensus” and “Nakamoto consensus” models in blockchain network decision-making.

“The way this protocol works is incredibly simple yet incredibly powerful,” he said.

Sirer and his team have been working on the white paper for this protocol family for months, he said, but it was developed by a pseudonymous team called “Team Rocket” after the Pokemon characters.

Referred to as Snowflake, Snowball and Avalanche, the protocols randomly sample network participants, and ultimately choose a single result, Sirer said. “They rely on randomness and they rely on random interactions and yet they ensure after the interactions everyone has decided the same thing.”

According to the white paper:

“Inspired by gossip algorithms, this new family gains its safety through a deliberately metastable mechanism. Specifically, the system operates by repeatedly sampling the network at random, and steering the correct nodes towards the same outcome.”

Nakamoto consensus protocols (of which bitcoin is the best known) require miners to agree to a specific decision before it can be enacted, while classical consensus requires a two-thirds plus one majority, Sirer said during his talk.

However, not everyone agrees that this is a novel breakthrough.

Ethereum developer Vlad Zamfir said on Twitter that due to the nature of the protocols, they fail to combine “the best of Nakamoto consensus with the best of classical consensus” as Sirer asserted.

Zamfir, who is the leading researcher behind ethereum’s upcoming proof-of-stake protocol Casper CBC, said the new protocols combine “the worst of both worlds,” due to aspects of the code that could lead to weakened security.

“It’s not asynchronously safe and it’s probabilistic,” he said, later adding “We don’t get to take a probabilistic model of the network for granted [in my opinion].”

NY Grants Fifth-Ever BitLicense to Genesis Global Trading

Genesis Global Trading has obtained a BitLicense from the state Department of Financial Services (DFS), making it only the fifth firm in three years to receive the controversial license.

The cryptocurrency market maker, based in New York City, and DFS announced the news in separate press releases Thursday.

In the regulator’s release, New York financial services superintendent Maria Vullo said, “New York continues to lead the nation in regulating the growing fintech industry.”

But the BitLicense has come in for intense criticism from cryptocurrency entrepreneurs. Speaking at CoinDesk’s Consensus 2018 conference Tuesday, ShapeShift CEO Erik Voorhees called the regulation an “absolute failure” that “should be removed.” He said it was “pathetic” that only a handful of firms had received BitLicenses after three years. “That’s the rate of innovation in New York.”

Several exchanges have stopped operating in the state, including ShapeShift and Kraken.

Despite lacking a BitLicense prior to this week, Genesis Trading has been operating in New York under a safe harbor provision.

Paxos holds a limited-purpose trust company charter from DFS, as does Gemini Trust Company, a cryptocurrency exchange.

New York became the first state to craft a regulatory structure specifically for cryptocurrencies in 2014, and finalized the BitLicense in August 2015.

The other four firms to receive the license are Circle, in 2015; XRP II, a Ripple subsidiary that sells XRP, the following year; and Coinbase and bitFlyer in 2017.

Axoni, Clearmatics Claim Milestone for Blockchain Interoperability

Two of the most prominent startups in enterprise blockchain are teaming up to tackle the hard, but now seemingly inescapable problem of interoperability.

At Consensus 2018 this week, Clearmatics and Axoni demonstrated how a financial derivative can be issued via a smart contract, trigger a payment and then instigate a cross-chain atomic transfer of value between two distinct networks. This marked the first time a derivatives contract has been originated on one enterprise blockchain and settled on another.

The milestone is important because interoperability is now emerging as a key design goal of distributed ledger technology (DLT).

While the financial world may be moving from a state of many ledgers to fewer ones, blockchain architects have come to realize that trades, deals and transactions will probably never be originated, processed and settled by a single, monolithic system.

Robert Sams, the CEO of Clearmatics, told CoinDesk:

“Facilitating end-to-end processing from point of trade to settlement, we need to make the assumption that that process is going travel through multiple systems, rather than a single monolithic settlement system, distributed or otherwise.”

The collaboration is significant also because of the clout of the players involved.

Axoni, based in New York, is working with a wide range of leading financial institutions and infrastructure providers to move trillions of notional value in U.S. dollars onto blockchain tech across a variety of asset classes.

Meanwhile, its partner in the demo, Clearmatics of London, is working with a consortium of banks and financial institutions to create digital fiat that is fully collateralized by cash at the corresponding central bank and transferable on a distributed ledger.

Axoni has also been doing a lot of work in the derivatives space and other areas of post-trade processes, while Clearmatics is focused on the settlement side of things, so the pairing was an obvious fit (both are building technology based on ethereum-derived architecture).

“If we can collaborate appropriately and facilitate linkage between those networks, what you end up with is a highly automated, highly transparent process all the way from trade agreement through to settlement finality,” said Greg Schvey, the CEO of Axoni.

Lessons from crypto

Stepping back, it’s fair to say blockchain interoperability is at the R&D stage.

To make sense of the problem involves a lot of requirements based on use cases and the domain applications, which all have to be considered together. Sams emphasized that the interoperability demo was just a proof of concept – but an important one, because it drives the spirit of open source collaboration.

“Interoperability needs to be tackled in a open and collaborative fashion and built around open standards and open source implementations,” he said, adding:

“There will probably be multiple types of interoperability solutions – not many, but more than one.”

The same spirit extends to the public blockchain community, where a lot of cutting-edge work is being done on the very technical aspects of the topic.

“There’s a lot of overlap between cross-chain atomic swaps in the cryptocurrency space and the stuff that we are doing,” said Sams. “Even though the domain application is entirely different, the underlying technological primitives are very similar.”

The contract in question was modeled using Axoni’s domain-specific language, AxLang, and then settlement finality of the resulting cash payments was achieved across different permissioned, ethereum-compatible ledgers.

Clearmatics’ contribution to the demo was Ion, an open source interoperability protocol, designed to perform atomic cross-chain transactions.

Lingua franca

The AxLang smart programing language used here was developed by Axoni to make working with smart contracts in an enterprise setting a sure thing, so to speak.

Axlang is based on Scala and enables formal verification of smart contracts, a rigorous mathematical method used to prove the correctness of computer programs. It can also compile to both the Java and the ethereum virtual machines.

However, developers are often asked, why another programing language?

Schvey said that doing lots of work with large-scale application design on blockchains revealed certain requirements not being met by Solidity, the first step into programming smart contracts among the ethereum community.

In particular, Solidity lacks formal verification, which is the ability to have mathematical proofs that the code written has compiled properly, Schvey said.

“Being able to check for certain error vectors is a very powerful concept, especially if you are deploying a large scale multi-party infrastructure with a lot of value going through it,” he said.

Indeed, the proof of concept marries two hard technical challenges: interoperability and formal verification. And there’s an important connection between the two, Sams pointed out.

“Imagine an end state of distributed market infrastructure where you have an end-to-end process flow, occurring through multiple systems,” he said.

“It’s obviously going to be very important that at the semantic layer, a system taking over a process from another system, and vice versa, understands and can demonstrate exactly what the business logic is that they are consuming or producing for another system to consume.”

Infosys Partners with 7 Banks for Blockchain Trade Finance Network

Indian IT giant Infosys is exploring the potential of blockchain technology to bring new efficiencies in trade finance.

Infosys Finacle, a subsidiary of the firm, announced Wednesday the development of a trade network called India Trade Connect (ITC) in partnership with seven Indian private banks, including ICICI, Axis Bank, South Indian Bank and Yes Bank.

The blockchain-based network has been designed to digitize trade finance business processes and covers areas such as ownership validation, certification of documents and payments.

ITC is currently being used by the banks for a pilot project, using the blockchain-based solution to, a release states, increase automation and transparency, and help manage risks in trade and supply chain financing. According to Infosys, ITC has been built to be blockchain “agnostic” in order to “future-proof” the network against future changes in technology.

Sanat Rao, chief business officer at Infosys Finacle, said he hopes to bring more banks into the consortium in order so they can learn about the potential benefits of blockchain systems.

Rao said:

“Digitization of trade finance processes using distributed ledger technology offers immense potential to eliminate the friction, cut costs and increase revenue through new business products that are now viable using the modern technologies.”

ICICI bank, which recently announced a blockchain trade finance initiative involving over 250 companies, said that the partnership “will enable automation, increase transparency as well as enhance efficiency across trade and supply chain operations.”

Going forward, the group aims to create a “comprehensive blockchain ecosystem, thereby contributing towards greater adoption of this technology,” said Ajay Gupta, senior general manager at ICICI Bank.

Tel-Aviv Stock Exchange Turns to Blockchain for New Lending Platform

The Tel Aviv Stock Exchange (TASE) is teaming up with Accenture and The Floor, an Israeli fintech hub, to build a blockchain securities lending (BSL) platform aimed to allow direct lending of all financial instruments.

The BSL will act as a “one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter time-frames, even operating in shorter-term positions,” a press release states.

With the use of distributed ledger technology from blockchain consortium Hyperledger, the platform is designed to reduce costs, increase security and provide more flexible lending activities. More specifically, the project is built on top of Hyperledger’s Sawtooth platform, with hardware-based Software Guard Extensions security provided by Intel.

Blockchain, the firms say, improves data privacy for users of the system, and enables peer-to-peer transactions, smart contract functionality and the security of an immutable ledger.

Ittai Ben-Zeev, CEO of TASE, said:

“Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform. Without a doubt, TASE is now, more than ever before, a global financial innovation leader.”

For its role in the project, Accenture will work on the platform’s smart contracts development, as well as offering other services to support the BSL platform, including project management, systems integration, cybersecurity consulting, and others.

“We are very pleased to provide our expertise and capabilities in blockchain, capital markets and fintech ecosystems in order to facilitate this exceptional collaboration,” said Jacob Benadiba, managing director of Israel Accenture. “This project will help TASE create an innovative end-to-end solution that addresses their business, security and technological needs under an extremely powerful new paradigm.”